AMD wins significant GPU market share from NVIDIA

August started off badly for Advanced Micro Devices (AMD) as the company cut its profits for 2019. August, however, comes to a positive end. A Jon Peddie Research report found that AMD's market share for graphics processors increased sequentially by 940 bps to 32.1% in the second quarter.

A separate JPR report showed that AMD's graphics processor shipments increased sequentially by 9.8% in the second quarter. On the other hand, NVIDIA's (NVDA) GPU shipments remained unchanged, while Intel's GPU shipments fell 1.4%. This was the first time in five years that AMD's GPU market share exceeded NVIDIA.

The JPR data includes both discrete and integrated GPUs. Even in integrated GPUs, the data includes GPUs used in PCs and Crypto Mining, and those used in game consoles and servers. Before we go into detail on the market share data, let's take a look at some GPU basics.

What is a GPU?

A GPU is a programmable logic chip used to render graphics such as images and videos. It is also used for parallel processing of non-graphics applications that require repetitive computing. Therefore, GPUs are used in desktops, notebooks, game consoles, servers, and crypto mining. There are two types of GPUs:

The first is the discrete AIB (add-in card). It has its own memory and is externally connected to a system. AMD and NVIDIA manufacture these GPUs and deliver them to AIB suppliers such as Gigabyte. Some of these Original Equipment Manufacturers (AIB) OEMs only sell AMD or NVIDIA GPUs, and some OEMs sell both. In addition to the AIB providers, some PC OEMs also offer AIBs as an option in addition to PCs or aftermarket products.

The second GPU type includes integrated graphics. It is embedded next to the CPU (central processing unit) on a single chip. The GPU and the CPU share the system memory. Intel is a leader in this field as it plays a dominant role in the PC-CPU market.

AMD's GPU shipments outperform the market [19659005] The second quarter is seasonally affected by weak GPU sales, in the second quarter of 2019 it was different. JPR data for the second quarter showed that PC-GPU shipments increased sequentially by 0.6%, as a 9.25% increase in PC shipments more than offset 16.6%. Drop in shipments of discrete AIBs.

The segment for integrated GPUs is much larger than the segment for discrete GPUs. The segment for discrete GPUs includes only gamers and professionals willing to spend more on a GPU. However, the segment for integrated GPUs includes most PC buyers.

Total shipments of PC GPUs declined 10.4% year-on-year in the second quarter, as deliveries of crypto GPUs were not included in the quarter. The impact of these GPU deliveries was reflected in AMD and NVIDIA revenues in the second quarter. The sales of both companies increased sequentially, but declined year-on-year.